The effect of old-age insurance on male retirement : evidence from historical cross-country data
I examine the effect of Old-Age Insurance systems on the labour supply of older men. Male retirement ages are crucial to the solvency of OAI systems. Historical data on participation rates and OAI rules in thirteen developed countries show rapid falls in participation among men aged 60-4 after pensions were extended to them. I estimate participation elasticities of -0.06 with respect to replacement rates and 0.19 to the net-of-tax wage. It does not appear that endogenous OAI changes bias the regression coefficients. The growth of OAI explains about 11 percent of the reduction in participation of men aged 60-4 since 1920; greater wealth probably explains most of the remainder.
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